Toys R Us is at risk of breaching a covenant on one of its loans, intensifying concerns about its ability to emerge from bankruptcy protection, sources familiar with the situation tell CNBC.
The storied toy retailer secured a $3.1 billion loan from a group of lenders led by J.P. Morgan Chase
prior to filing for bankruptcy protection. That loan, a so-called
debtor-in-possession, or "DIP," loan is given to a company to provide
the money it needs to invest in the business while it is in bankruptcy.
But after a dismal holiday season, Toys R Us is now at risk of having too little cash to satisfy the terms of the loan.. . . more